THE WORKS ARE COMPLETED AT THE NATIONAL ECONOMIC UNIVERSITY
MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMIC UNIVERSITY ---------------------------------
Science instructor:
1. Assoc. Prof. Ph.D. NGUYEN THI DONG 2. Assoc. Prof. Ph.D. VU DINH HIEN
DOAN THI HONG NHUNG
Reviewer 1: Reviewer 2: Reviewer 3:
STUDYING THE EFFECT OF GOODWILL INFORMATION ON THE MARKET VALUE OF COMPANIES LISTED ON VIETNAM’S STOCK MARKET Major: ACCOUNTING, AUDIT AND ANALYSIS Code: 9340301
The thesis is protected before the Council of dissertation National Economics University On ……/ ……/ 2020
THESIS SUMMARY
Thesis can be further referred at: - National Library - Library of National Economics University
HA NOI – 2020
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Chapter 5: Recommendations for related parties INTRODUCTION Object and scope of the study
The necessity of the study
• Research object: The dissertation studies the impact of goodwill information published on the consolidated financial statements on the market value of companies listed on Vietnam's stock market. Goodwill is a controversial issue in the world because of the complexity in identifying and measuring them (Dicksee và Tillyard, 1906). Studies in developed • Research scope: countries such as the United Kingdom, USA, France, etc… show that goodwill is an important asset and affects the market value of the listed companies. In the current
developing economy of Vietnam, goodwill is still a new and complicated issue for businesses. Therefore, the study assessing the effect of goodwill information on the market value of companies listed on Vietnam's stock market is economic significance. Scope of research on time: The thesis uses research data from 2010 to 2017. Scope of research on space: The sample includes 109 companies listed on Vietnam's stock market with the minimum listing time from 2010 and continue to list at least until 2018.
Based on the research results, the author of the dissertation makes recommendations to subjects such as Ministry of Finance, listed companies, auditing companies, users of Scope of research on the content: This thesis only focuses on researching positive goodwill presented on the Consolidated Balance Sheet. The thesis assesses the
financial statements and universities in order to improve the presentation and disclosure of goodwill information. effect of goodwill information on the market value of companies listed on Vietnam's stock market from 2010 to 2017. Research objectives and research questions New contributions of research The research objective of the thesis is to study the effect of goodwill information on the market value of companies listed on Vietnam's stock market. Firstly, this study is conducted in the new research context that is a developing economy. The research results have proved that goodwill information has a positive
impact on the market value of companies listed on Vietnam's stock market. This proves that investors have an interest in goodwill information even when the goodwill • Question 1: How goodwill information presented on the consolidated financial statements affects the market value of companies listed on Vietnam's stock market from 2010 to 2017? information published in the financial statements is limited.
• Question 2: Is the impact of goodwill information on the market value of companies listed on Vietnam's stock market before and after Circular 202/2014/ Secondly, by comparing the impact of goodwill information on the market value of companies listed on Vietnam's stock market before and after the application TT-BTC different?
of Circular 202/2014/TT-BTC, the results show that the effect of goodwill information on the market value of companies at these two stages is the same. Thus, the reaction of • Question 3: Is there any difference between the average growth of market value of the companies disclosing goodwill information and the group of companies not disclosing goodwill information? investors was not different to the goodwill information published in the consolidated financial statements before and after Circular 202/2014/TT-BTC was issued. Thesis structure Finally, the result from comparing the average growth of the market value of the companies with increased goodwill and the group of companies without increased The thesis is designed in a structure of 5 chapters goodwill during the period proves that the group of companies with increased goodwill Chapter 1: Literature review
Chapter 2: Rationale for goodwill and market value had average growth of market value higher than the group of companies without increased goodwill. The study also focused on examining and evaluating the impact of Chapter 3: Research methodology "purchase price" and "net asset value of the acquired company" on the average growth of market value of companies listed on Vietnam’s stock market. "purchase price" Chapter 4: Research results and discussion
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CHAPTER 1: LITERATURE REVIEW
information is interest to investors and has an impact on the average growth of market value of listed companies. Meanwhile, there was no difference in the growth of market 1.1 Literature review of goodwill
value between the group of companies that disclosed the information of “net assets value of the acquired company” and the group of companies that did not disclose this Researches on goodwill in the world now focus on two main directions, namely: Assessing the effect of goodwill on the market value of companies listed on information. The research results clearly show that investors are interested in different
the stock market and assessing the level of compliance in the disclosure of goodwill information of companies listed on the stock market. types of information on goodwill. Simple information such as information about "purchase prices" that investors can easily identify should have an impact on the
growth of market value of companies. Meanwhile, with more complex information such as the information "net assets value of the acquired company", which requires a Studies focus on assessing whether investors consider goodwill to be assets and goodwill affects the stock prices of companies listed on the stock market? Most of the studies stated that goodwill has a positive influence on the market value of listed deep understanding of accounting, investors do not have a distinction when making business decisions. companies and from that the studies conclude that goodwill is considered an asset by investors (Chauvin, 1994; Wang, 1993; Wang, 1995; Qureshi và Ashraf, 2013; New proposals drawn from the research results McCarthy và Schneider, 1995) Based on the research results, Contrary to the results of studies conducted on regression of market value the author has made a number of recommendations for various entities involved in the development and implementation
according to goodwill, the study of Kathleen Blackburn and Ayres (2000) conducted in the event study method showed that there is a negative association between the of goodwill accounting such as: Issuing accounting standards for impairment of assets; issuing legal documents to guide fair value measurement; regulations of disclosing of goodwill change and the abnormal returns of stock on the market. information as a basis for goodwill impairment; issuing regulations on sanctions for violations of disclosing of information on financial statements; improving corporate Several studies assess the impact of goodwill amortization on the market value of listed companies (Jennings et al., 2001; Churyk and Chewning, 2003). The research responsibility and the awareness of the benefits of complying with the disclosure requirements on the consolidated financial statements; improving the professional qualifications of accountants, lecturers and accounting students as well as raising the results show an inverse relationship between the value of goodwill amortization and the market value of companies. This result is consistent with the investors' opinion that goodwill is devalued and negatively affects the market value of companies. awareness of users of financial statements about the need and requirements for disclosure of relevant information related to goodwill. Hirschey and Richardson (2003) studied the effect of goodwill impairment on stock returns in the market. The results show that goodwill impairment has a negative impact on stock returns.
In the current context of Vietnam, assessing the goodwill impairment is still a
new and complicated thing, so there have been no empirical studies examining the impact of the goodwill impairment on the market value of companies listed on
Vietnam's stock market. However, the study by Tran Manh Dung (2016) has clarified some complex issues when applying goodwill impairment in Vietnam. The study also pointed out implications for Vietnam when applying goodwill impairment.
A number of studies have focused on assessing the level of compliance in disclosing information about goodwill of companies listed on the stock market (Izzo et al., 2013; Devalle and Rizzato, 2012; Carlin et al., 2009). Some studies also examine
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information such as information on “purchase price” or information on “net asset value of the acquired company” on average growth in market value of listed companies. the appropriateness of discount rates used by listed companies in assessing goodwill impairment by comparing the discount rates used by companies with the discount rates
Fourth, the researchs were done with data a long time ago, from 1988 to 2010. calculated independently by researchers (Finch and Carlin, 2010; Tran, 2011). The research results show that the level of compliance in disclosing information on goodwill of listed companies is low but tends to improve in a positive direction. This proves that the research results have not timely updated the changes of economies.
Tran Manh Dung's (2014) study analyzed the improvement of compliance in disclosing goodwill information of listed companies in Hong Kong between 2005 and The result from analysing of the research gap shows that the study of the influence of goodwill information on the market value of companies listed on
2006 using the non-test Parameter Wilcoxon Signed Ranks test. The results have shown an improvement in the level of compliance in the disclosure of goodwill
information of companies listed on the Hong Kong stock market. However, this study has only been compared for two years, so it is not possible to confirm with certainty that this improvement is trendy. Vietnam's stock market in the context of the developing economy of Vietnam is really necessary. Therefore, the author has chosen the research topic: "Studying the effect of goodwill information on the market value of companies listed on Vietnam's stock market".
In the context of Vietnam, the studies which assessed the compliance of listed companies in disclosing goodwill information are still at a simple level and small
sample size (Doan Thi Hong Nhung, 2019). A number of studies mainly focus on discussing the accounting method of goodwill or comparing the difference between
goodwill accounting according to Vietnamese accounting standards and goodwill accounting according to international accounting standards (Nguyen Minh Phuong and Le Hong Van, 2013; Nguyen Thi Kim Huong, 2015).
1.2 Research gaps
On the basis of an overview of prior studies, the author found that some research gaps still exist as follows:
Firstly, most of the quantitative studies on the impact of goodwill on the market
value of listed companies are conducted with data collected from listed companies on the stock markets in the countries with developed economies such as the United States,
the United Kingdom, Europe ... Thus, no studies assess the impact of goodwill on the market value of listed companies in the developing countries like Vietnam.
Secondly, the researches in the world stop at considering the impact of goodwill
on the market value of listed companies each year. No studies have compared the difference in the influence of companies with new goodwill during the period and
those that did not have a new goodwill during the period to the average growth of market value of the companies.
Thirdly, the studies mainly focused on assessing the impact of goodwill information in general. No studies have examined the impact of each type of detailed
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CHAPTER 2: RATIONALE OF GOODWILL AND MARKET VALUE Currently, there are three methods of determining market value: Calculating market value using market capitalization; calculating market value by comparing with 2.1 Rationale for goodwill equivalent company; determining market value by the multiplier method Goodwill is a very complex issue both from the perspective of identification In summary, in the case of valuing a listed company, the most appropriate method is to determine the market value based on market capitalization. and measurement (Dicksee and Tillyard, 1906). Therefore, there are many different views on goodwill in the world. 2.3 The relationship between goodwill and market value - Efficient market theory
Studies of the impact of goodwill on the market value of listed companies are The Super - Profit Theory of Goodwill: Leake (1921) defines goodwill as the right to develop all past efforts to seek profit, add value or advantage other in the
based on efficient market theory (Ohlson, 1995b; Ohlson, 1995a; Chauvin, 1994; McCarthy and Schneider, 1995; Wang, 1993; Qureshi and Ashraf, 2013). Efficient future. Businesses that buy goodwill are essentially paying for the super profits they expect to gain in the future. (Leake, 1921 cited by Ratiu and Tudor, 2013). market theory first appeared in the research of Eugene F. Fama and colleagues at the The Momentum Theory of Goodwill: The theory hypothesizes that a
University of Chicago in 1969. According to this theory, the efficient market is the market in which the price of these stocks fully reflects the market information (Eugene businessperson buys a thrust in place of a regular revenue. Nelson (1953) argues that the buyer needs to pay a fee for the acquired advantages of the acquired company instead of spending money to create those advantages from the beginning. F. Fama et al., 1969). According to Fama (1970) efficient markets are divided into three types. Firstly, the efficient market is weak. Second, the efficient market is in IFRS 3 - Business combination announced the definition of goodwill “Goodwill medium form. Finally, the efficient market is strong. is an asset representing the future economic benefits arising from other assets acquired Goodwill information is presented on the consolidated financial statements of listed companies. Therefore, efficient market theory assumes that goodwill in a business combination that are not individually identified and separately recognised” (IASB, 2004, p.13).
information will have an impact on the market value of listed companies. Goodwill is measured on the basis of the difference between the cost of acquisition and the fair value of the net assets of the subsidiary at the acquisition date held by the parent company (Ministry of Finance, 2014).
When conducting a business combination, goodwill arising in the acquisition process (if any) is recognized as an asset and presented in the consolidated financial statements of the acquiring company.
After recognition of goodwill as an asset, depending on the regulations of each country, goodwill is amortized over a limited period of time or impaired annually.
The acquirer should present and disclose goodwill information on the consolidated financial statements in accordance with specific regulations of each country.
2.2 Rationale for market value of companies listed on the stock market
Market value is the price of an asset determined when trading on the market (Chen, 2019).
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CHAPTER 3: RESEARCH METHODS If the goodwill information presented in the consolidated financial statements in accordance with the guidance of Circular 202/2014/TT-BTC is more reliable, the 3.1 Research process
The overall research process of the thesis is done through seven steps: (1)
impact of goodwill information on the market value of listed companies before and after the Ministry of Finance issues Circular 202 will be different. Therefore, the coefficient β6 will be different from zero Identify research issues; (2) Overview of research; (3) Identify research gaps; (4) Building models and research hypotheses; (5) Data collection; (6) Data analysis and Hypothesis 2: (7) Report writing H0: GW has the same impact on the market value of listed companies before 3.2 Research models and hypotheses and after TT202. The model used in this study was developed from the Landsman model (1986) H1:GW has a different impact on the market value of listed companies before and the Ohlson model (1993). and after TT202. In this study, the author focuses on assessing the impact of goodwill
To assess whether goodwill affects the average growth of market value of companies listed on Vietnam's stock market? The author compared the average growth information on the market value of listed companies. Therefore, the ASSET variable will be separated into the following two variables: the variable ALGW- The book
of market value of the group of companies with increased goodwill and the average growth of market value of the group of companies without increased goodwill over the value of the asset minus the goodwill and the variable GW- The book value of goodwill. The author added the model the variable TT202 - The effect of TT202 and period from 2010 to 2017, the following hypothesis was tested: the variable TT202*GW that is equal to TT202 multiplied by GW in oder to compare Hypothesis 3: the impact of goodwill on the market value of companies listed on Vietnam’s stock market before and after the introduction of Circular 202/2014/TT-BTC.
Regression model: H0: There is no difference between the average growth of market value of the group of companies with increased goodwill in the period compared with the average growth of market value of the group of companies without increased goodwill in period.
MVi,t = β0 + β1*ALGWi,t + β2*GWi,t + β3*TLi,t + β4*INCi,t + β5*TT202i,t + β6*TT202*GWi,t + Ui + ei,t (3) H1: There is a difference between the average growth of market value of the group of companies with increased goodwill in the period compared with the average growth of market value of the group of companies without increased goodwill during In which: MV: Market value of listed companies; ALGW: Assets minus goodwill; GW: Goodwill; TL: Liabilities; INC: Profit after tax; TT202: Impact of Circular 202 the period.
In the group of companies with increased goodwill during the period, the author In the regression model (3), the coefficient β2 of goodwill is the main factor of interest. If investors consider goodwill to be an asset which brings future economic
benefits to companies, goodwill will have a positive impact on the market value of listed companies. Therefore, the coefficient β2 will be positively correlated with the market value of companies of the thesis continues to check whether the disclosure of the information about "purchase price" and "net asset value of the acquired company" used to calculate goodwill affects the average growth of market value of these groups of companies by testing the following two hypotheses: Hypothesis 1: Hypothesis 3a: H0: GW has no impact on the market value of listed companies
H1: GW has an impact on the market value of listed companies. H0: There is no difference between the average growth of market value of the group of companies that announced the “purchase price” during the period compared
with the average growth of market value of the group of companies that did not announce the “purchase price” during the period.
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The variable TT202*GW is equal to the variable TT202 multiplied by the H1: There is a difference between the average growth of market value of the group of companies that announced the "purchase price" in the period compared with variable GW.
Information about the average growth of market value of the group of companies that did not announce the "buying price" in the period.
Hypothesis 3b: the company announcing the purchase price upon consolidation: The company announcing the purchase price will receive the value of 1, the company not announcing the purchase price will receive the value of 0.
H0: There is no difference between the average growth of market value of the groups of companies: the group discloses using “fair value of the acquired company”;
the group declares to use the “carrying amount of the acquired company”; the group did not publish the information. Information disclosed by companies on the use of net assets value of the acquired company when calculating the value of goodwill: The company that used the fair value will receive value of 2, the company that used the book value then will receive the value of 1, the company did not publish this information, the value is 0.
H1: There is a difference between the average growth of market value of groups of companies: the group discloses using the "fair value of the acquired company"; the group claims to use the "carrying amount of the acquired company"; the group did not Information of increased goodwill in a period: The company which disclosed the increase in goodwill during the period will receive value of 1, the company did not announce the increase in goodwill in the period will receive value of 0. publish the information. 3.3 Data collection Information disclosed to reduced goodwill during a period: If the company declared the value of decreased goodwill during the period, the value is 1, the company did not announce the decrease in goodwill during the period, it receives value 0. The data was directly collected by the author from the financial statements of companies listed on Vietnam's stock market for 8 years, from 2010 to 2017. Information disclosed on the amount of goodwill amortized in the period: The company that disclosed the amount of goodwill amortized in the period will receive Collecting the number of common shares published in the annual audited Notes to the financial statements of the companies listed on Vietnam's stock market. value 1, the company that did not announce the amount of goodwill amortized in the period will receive value 0. Collecting the closing prices of the first trading day of the second quarter every
Information disclosed about the time to allocate goodwill: The company that announced the time to allocate goodwill will receive value 1, the company that did not year on the websites of Ho Chi Minh City Stock Exchange, Hanoi Stock Exchange and websites such as www.ssi.com.vn ... announce the time to allocate goodwill will receive value 0 . Collecting value of total assets at code 270 on the annual audited consolidated balance sheet. Information disclosed to impairment of goodwill: A company which published impairment of goodwill will receive value 1, the company did not publish impairment Collecting the value of goodwill at code 269 on the annual audited consolidated of goodwill will get value 0. balance sheet.
Collecting value of total liabilities at code 300 on the annual audited consolidated balance sheet. Sampling criteria: Sample was selected from joint stock companies listed on the Ho Chi Minh Stock Exchange and Hanoi Stock Exchange announced goodwill ≥ 0 in the financial statements during the period from 2010 to 2017. Companies were selected Collecting value of profit after tax at code 60 on the annual audited according to the industry standard ICB (Industry Classification Benchmark), including the consolidated income statement. following 10 sectors: Oil and Gas; Industry; Consumer goods; Medical; Consumer services; Telecommunication; Infrastructure services; Finance; Technology and Basic Materials. The dummy variable TT202 receives value 1 in 2015, 2016 and 2017, receiving value 0 in the remaining years. After removing unqualified samples, final research samples include 872 observations of 109 companies listed on Vietnam's stock market from 2010 to 2017.
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3.4 Data analysis CHAPTER 4: RESULTS AND DISCUSSION The author of the thesis used Stata software version 14 to perform statistical 4.1 The situation of disclosing goodwill information of companies listed on analysis steps describing the basic characteristics of the research variables such as Vietnam's stock market
maximum value, minimum value, average value and deviation between the mean value of the variables and the true value. The author of the thesis has also performed the By analysing the status of goodwill information disclosure of companies listed on Vietnam's stock market, the results show that the level of compliance in the
steps of testing the research model such as multicollinearity test, model selection test, autocorrelation test, cross-correlation test, heteroscedasticity test and take corrective disclosure of goodwill information of listed companies is very low. Simple information such as "the value of amortized goodwill" or the "time to amortize steps to get a consistent result. To compare the difference in growth of market value among groups of goodwill" is often well publicized by companies. Meanwhile, more complex information such as the "purchase price" and "net assets value of the acquired company" used to calculate goodwill are often overlooked. This proves that the companies, the author of the thesis calculated the average growth of market value in 8 years of 109 listed companies in the research sample as follows:
complexity of the information affects the disclosure of goodwill information of companies listed on Vietnam's stock market. However, the trend analysis also shows
Average growth of market value = [(MV2011 – MV2010)/MV2010 + (MV2012 – MV2011)/MV2011 + (MV2013 – MV2012)/MV2012 + (MV2014 – MV2013)/MV2013 + (MV2015 – MV2014)/MV2014 + (MV2016 – MV2015)/MV2015 + (MV2017 – MV2016)/MV2016 ]/7 an improvement in the disclosure of goodwill information of companies listed on the Vietnam’s stock market over the years. In which: MV: The market value of the companies corresponds to each year 4.2 Assessing the impact of goodwill information on the market value of companies listed on Vietnam's stock market With the sample size of 109 companies, the author of the thesis has conducted the following verification steps: The multi-collinearity test results show that the VIF coefficients are very high.
First, using the Mann-Whitney non-parametric test to test the difference between the average growth of market value of the group of companies with increased Thus, the model exists multi-collinear phenomenon. The author has made independent variables and dependent variables in the model to overcome the multi-collinear
goodwill during the period and the average growth of market value of the group of companies without increased goodwill in the period. phenomenon. The variables GW, TL and INC are deflated by dividing the book value of total assets and taking logarithms for the two variables MV and ALGW.
The model using adjustment variables is rewritten as follows: Second, using the Mann-Whitney test to examine the difference between the average growth of market value of the group of companies that announced the purchase price and
lnMVi,t = β0 + β1*lnALGWi,t + β2*GW2i,t + β3*LEVi,t + β4*INC2i,t + β5*TT202i,t + β6*TT202*GW2i,t + Ui + ei,t (4) the average growth of market value of the group of companies that did not announce purchase price when these companies have increased goodwill during the period.
Finally, using the Kruskal Wallis test to assess the difference between the average growth of market value of the three groups of companies when disclosing information about the net assets value of subsidiaries used when calculating goodwill, According to model test results (4), VIF coefficients are all smaller than 10. This proves that multi-collinear phenomena no longer occur for independent variables of the research model. Breusch and Pagan LM test results showed that the coefficient p <0.1, so the includes: the first group is the group of companies disclosed using the fair value of net assets of its subsidiaries; the second group is the group of companies that disclosed random effect model was selected. Next, the Hausman test was performed with p-value <0.1, so the fixed effect using the net book value of subsidiaries and the third group is the group of companies that did not disclose this information. model was chosen.
The results of the autocorrelation test showed that the coefficient p-value <0.1. This proves that the model has autocorrelation.
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The author used Pesaran's test to check the independence between the residuals of cross elements and the result showed p-value <0.1, so the model has a cross on Vietnam's stock market show the coefficient β2 = 0.785 with a 5% significance level (p-value = 0.004 <0.05). This proves that goodwill information has a positive correlation phenomenon. impact on the market value of listed companies because investors believe that goodwill is an asset and it will bring benefits of economic for businesses even in the condition The test results show that p-value value <0.1 model exists heteroscedasticity of developing economy of Vietnam. phenomenon.
4.3 Assessing the effect of disclosure of goodwill information on the average growth of market value of companies listed on Vietnam's stock market To overcome the autocorrelation, cross-correlation and heteroscedasticity of model. The author has used the feasible general least squares regression method
(FGLS). The results show that the heteroscedasticity phenomenon, autocorrelation and cross correlation were overcome. The test result of hypothesis 3 shows that with the 5% significance level (p- value = 0.007) we can conclude that the group of companies with increased goodwill in the period had average growth of market value higher than the average growth of market The results of regression analysis and the theoretical model of the impact of goodwill information on the market value of companies listed on Vietnam's stock value of the group of companies without increased goodwill during the period.
Test result of sub-hypothesis 3a shows that with the 5% significance level (p- market suggest that the linear regression equation for the model is built as follows: Regression equation:
value = 0.021) we can conclude that the group of companies announced the purchase price has an average growth of the market value higher than the average growth of lnMVit = -0,6209 + 1,118*lnALGWit + 0,785*GW2it – 1,102*LEVit + 0,922*INC2it - 0,026*TT202it - 0,218*TT202GW2it market value of the group of companies did not disclose the purchase price. The results of regression analysis show that the variables lnALGW, GW2, LEV Testing the sub-hypothesis 3b with a 5% significance level (p-value = 0.071) we can conclude that there is no difference in the average growth of market value and INC2 have an impact on lnMV at the statistical significance level of 5%. The variables lnALGW, GW2 and INC2 have a positive impact on lnMV. In case there is among the three groups of companies. only the change of one independent variable and the other independent variables 4.4 Discuss the research results
remain the same, when lnALGW increases by 1%, lnMV increases by approximately 1,118%, when GW2 increases by 1 unit, lnMV increases by 78.5%, when INC2 By testing the effect of goodwill information on the market value of companies listed on Vietnam's stock market, the results show that investors are interested in variable increased by 1 unit, lnMV variable increased by 92.2%. In contrast, the LEV variable has an inverse relationship with the lnMV variable. When the LEV variable is goodwill and this is reflected in the stock prices of companies listed on Vietnam's stock market. However, the reaction of investors on the information of goodwill is increased by 1 unit, the lnMV variable will decrease by 110.2%. different. This is clearly shown in the research results: investors respond very clearly The results show that the variable TT202 is statistically significant but the
variable TT202 * GW is not statistically significant. Therefore, accepting H0, rejecting H1 in research hypothesis 2. This means the impact of goodwill information on the market value of listed companies before and after the Ministry of Finance issued to information that can be easily and directly identified such as information about "purchase price" and "increased goodwill"; on the contrary, the response of the investor is not clear to the information which requires a certain understanding of the investor about goodwill such as information about "the value of net assets of the acquired company" used to calculate goodwill. Circular 202/2014/TT-BTC is the same. Thus, the reaction of investors on the the effective Circular information of goodwill announced before and after By comparing the impact of goodwill information on the market value of listed 202/2014/TT-BTC is not different. companies before and after Circular 202/2014/TT-BTC takes effect, the results show Although the statistical results show that goodwill accounts for a negligible
that there is no difference between these two periods. Thus, the response of investors to the goodwill information published in both periods is the same. Although Circular proportion in the total assets of companies listed on Vietnam's stock market, the results of model that assesses goodwill information on the market value of companies listed 202/2014/TT-BTC has more specific instructions than VAS No. 11 on the presentation
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CHAPTER 5: RECOMMENDATIONS TO RELATED PARTIES and disclosure of goodwill information on consolidated financial statements, businesses still face difficulties in determining the fair value of assets and liabilities as Goodwill is becoming an important asset for companies listed on Vietnam's stock well as measuring and assessing impairment of goodwill. market. Disclosure of goodwill information will affect the decision of the user of the
financial statements. From the research results on the level of compliance in disclosing goodwill information on the consolidated financial statements of companies listed on
Vietnam's stock market and the results of research on the influence of goodwill information on the market value of companies listed on Vietnam’s stock market, the
author makes recommendations to the subjects to improve the compliance level in disclosing goodwill information on consolidated financial statements in Vietnam.
5.1 Recommendations to the Ministry of Finance
Issuing accounting standards - Impairment of assets as a basis for businesses to impair goodwill. Issuing specific circulars that provide the guidance to determine fair
value. To promulgate specific regulations on public disclosure of information related to goodwill on financial statements. To promulgate legal corridors and impose strict
penalties for frauds and intentionally present false information related to goodwill on financial statements.
5.2 Recommendations for businesses
Dispatching accountants to take part in training courses on international accounting standards in general and goodwill accounting in particular. Businesses can
hire experts who have experience in valuation to assist in impairment of goodwill to achieve the most appropriate results. Attention should be paid to building a high- quality internal control system. 5.3 Recommendation to users of information on financial statements
Users of financial statements should be fully equipped with economic
knowledge. Users of financial statements, especially major shareholders, need to put pressure on companies and require them to provide full details on the notes of the financial statements. 5.4 Recommendations for auditing companies
Vietnamese auditing firms can provide advice and assistance to businesses on
the technical method of measuring goodwill and impairment of goodwill; show how to overcome difficulties in the implementation process. Auditing companies should guide
and propagate businesses should apply the impairment of goodwill. Point out the benefits of applying impairment of goodwill. Improve the professional qualifications
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CONCLUSION of auditors by acceptting auditors to participate in training courses and practice abroad on goodwill accounting. Goodwill is becoming increasingly important and influential to users of 5.5 Recommendations to Professional Associations financial statements. However, goodwill accounting is a complex issue when preparing
the consolidated financial statements. Incorrect measurement of goodwill and inadequate disclosure of goodwill may affect the decision of users of financial Professional associations should maintain and develop professional courses on goodwill accounting. Organize seminars around the topic of goodwill accounting. statements. the career counseling. Strengthen cooperation and New contributions of the thesis: Promote more effectively professional exchange with international professional associations
5.6 Recommendations for the university Firstly, the thesis has confirmed that goodwill information have a positive impact on the market value of listed companies in the context of a developing economy. Universities can invite experts to teach lecturers about IFRS in general and accounting standards of goodwill in particular. Develop a curriculum appropriate to
Secondly, the thesis's research results showed that the impact of goodwill information on the market value of listed companies before and after Circular each subject. Change the method of teaching accounting subjects. Organize seminars between lecturers, students and businesses to increase practicality with both lecturers 202/2014/TT-BTC was not different.
Finally, the author compares the average growth of market value of groups of and students. Creating favorable conditions for lecturers to participate in international accounting programs such as ACCA, CPA ... companies to indicate the complexity of the information that affects the reaction of investors in the market.
The limitations of the thesis:
The first is that the study used the carrying amount of assets, goodwill, liabilities, and profit after tax instead of market value.
The second is the low level of reliability of the goodwill value published in the consolidated financial statements.
Some suggestions for future research:
The research results show that no company has impairment of goodwill during the 3-year period from 2015 to 2017. Thus, in the future, research can be conducted to find the reason why companies are not ready to conduct impairment of goodwill.
Although the author has made many efforts, the thesis is difficult to avoid shortcomings. We hope to receive the contributions of scientists to improve the thesis
Thank you very much!
LIST OF SCIENTIFIC WORKS PUBLISHED
1. Doan Thi Hong Nhung (2015), “Identify goodwill in the consolidated financial statements according to VAS 11, the obstacles that apply in businesses”, Journal of Accounting and Auditing, No. 136+137, pp. 45- 47.
2. Doan Thi Hong Nhung and Vu Thi Kim Lan (2015), “New point on the exchange rate accounting according to Circular 200/2014/TT-BTC”, Journal of Accounting and Auditing, No. 147, pp. 37-39.
3. Doan Thi Hong Nhung (2017), “Goodwill: Current situation and solutions when applying IFRS in Vietnam”, Proceedings of the conference Training accounting and auditing according to international financial reporting standards in the industrial revolution 4.0, Hanoi University of Business and Technology, pp. 234-240.
4. Doan Thi Hong Nhung (2018), “Overview of studies on the relationship between goodwill and market value of the firm”, Proceedings of scientific works in 2018, Thang Long University, pp. 233-237.
5. Nguyen Thi Dong và Doan Thi Hong Nhung (2018), “Measuring goodwill on consolidated financial statements”, Journal of Accounting and Auditing, No. 183, pp. 12-14.
6. Doan Thi Hong Nhung (2019), “Disclosure of information on goodwill measurement on consolidated financial statements: Empirical research in Vietnam”, Journal of Accounting and Auditing, No. 186, pp. 61-64.
7. Doan Thi Hong Nhung (2019), “The relationship between goodwill and market value of enterprises listed on Vietnam's stock market”, Journal of Economics and Development, No. 261, pp. 12-19.
8. Doan Thi Hong Nhung (2019), “Compliance in disclosing goodwill information in the consolidated financial statements of joint stock companies listed on Vietnam's stock market”, Journal of Economics and Development, No. 269, pp. 82-92.
9. Doan Thi Hong Nhung (2019), “The Impact of Goodwill Information on the Average Growth of Market Value of Companies Listed on Vietnam's Stock Market”, Journal of Trade Science, Vol. 7, No. 4, pp. 40-47.
